FAC Explorer

Audit 31569

FY End
2022-09-30
Total Expended
$16.68M
Findings
2
Programs
4
Organization: Winslow Memorial Hospital D/b/a Little Colorado Medical Center (AZ)
Year: 2022 Accepted: 2023-03-12
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
33681 2022-003 Material Weakness Yes L
610123 2022-003 Material Weakness Yes L

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $3.98M Yes 0
93.498 Provider Relief Fund $2.65M Yes 1
93.155 Rural Health Research Centers $246,600 - 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $49,529 - 0

Contacts

Name Title Type
MQX3DMAA6BH7 Lona King Auditee
9282896393 Joy Feige Auditor
No contacts on file

Notes to SEFA

Title: Community Facilities Loans Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. Expenditures reported in this schedule consist of the beginning of the year outstanding loan balance for the direct loans and guaranteed Senior Secured Rural America Bond Series 2011A. There were no loan advances during the year ended September 30, 2022. The outstanding balances at September 30, 2022 were $8,539,594 and $1,001,032 for the direct USDA loans and $3,875,334 for the guaranteed Series 2011A bonds.
Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Winslow Memorial Hospital d/b/a Little Colorado Medical Center (the Hospital) under programs of the federal government for the year ended September 30, 2022. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Hospital, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Hospital.
Title: Provider Relief Funds Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Hospital received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) totaling $9,136,494 as of September 30, 2022. The PRF expenditures are not recognized on the schedule until the expenditures are included in the reporting to HHS as required under the PRF program.The following summarizes the Provider Relief funds and the timing of when the amounts were recognized in the financial statements. (see table in report)

Finding Details

Finding 2022-003
2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year ? Period 2 TIN #860107344 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Hospital did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 2 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 2 to ensure accurate quarterly reporting of net patient revenue. Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly. Questioned Costs: None reported relating to Period 2 as eligible expenditures and lost revenues exceeded Period 2 funds received. However, future amounts eligible for lost revenues is overstated by $745,480 on the Period 2 report. Context: There are 72 key line items related to lost revenue which were tested on the Period 2 Department of Health and Human Services special report. 54 of the 72 key line items did not actually represent net patient service revenue. Repeat Finding from Prior Years: Yes, prior year finding 2021-003 Recommendation: We recommend that the Hospital modify the lost revenue reported on future reports to reflect the year-end adjustments in the appropriate quarter. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-003
2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year ? Period 2 TIN #860107344 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Hospital did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 2 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 2 to ensure accurate quarterly reporting of net patient revenue. Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly. Questioned Costs: None reported relating to Period 2 as eligible expenditures and lost revenues exceeded Period 2 funds received. However, future amounts eligible for lost revenues is overstated by $745,480 on the Period 2 report. Context: There are 72 key line items related to lost revenue which were tested on the Period 2 Department of Health and Human Services special report. 54 of the 72 key line items did not actually represent net patient service revenue. Repeat Finding from Prior Years: Yes, prior year finding 2021-003 Recommendation: We recommend that the Hospital modify the lost revenue reported on future reports to reflect the year-end adjustments in the appropriate quarter. Views of Responsible Officials: Management agrees with the finding.